Bankruptcy Judge Barbara Houser yesterday ordered former billionaire Sam Wyly to pay $1.11 billion in back taxes, interest and penalties after finding he committed tax fraud by shielding much of his family's wealth in offshore trusts, Reuters reported. Judge Houser calculated the payout after ruling on May 10 that Wyly and his late brother Charles conducted a "deceptive and fraudulent" scheme to cheat the Internal Revenue Service. The payout includes roughly $135.5 million of taxes, $402.1 million of interest, and $570.1 million of penalties. The Wylys were once among Dallas' most prominent families, building their fortune on holdings in such companies as arts-and-crafts chain Michaels Stores Inc. and Sterling Software Inc. But Sam Wyly and his brother were sued in 2010 by the U.S. Securities and Exchange Commission, for allegedly using a web of trusts in the Isle of Man and Cayman Islands to hide stock sales from 1992 to 2004 in Michaels, Sterling and two other companies. Charles Wyly died in a car crash in August 2011, and the government thereafter pursued claims against his estate. Sam Wyly filed for bankruptcy protection in October 2014 after he and his brother's estate were held liable in the SEC case, for an amount the regulator estimated at $299.4 million. Read more.
For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.
